People nearing retirement age should have regular financial check-ups, Age UK’s Financial Services Commission (FSC) has said.
The appeal comes after an Age UK FSC report revealed that a fifth of people aged 50-64 are unprepared for retirement.
The FSC has made the following recommendations:
- regular financial ‘MOTs’ for retirees and those nearing retirement
- improved guidance and advisory services
- further innovation in retirement products
- a drive to increase honesty and transparency in the financial services industry.
The report is the culmination of meetings between Age UK’s FSC, a group of industry experts, government officials, consumer advocates and older people.
Age UK formed the FSC in 2013 to inform ways of helping people plan for retirement after Lord Filkin warned that the government and society was “woefully underprepared for the UK’s ageing population”.
According to recent research:
- one fifth of people aged 55 and over don’t have a private pension
- two-fifths of women don’t have a private pension; a fifth of men don’t either
- the median defined benefit scheme pot for men (£235,000) is almost double the amount for women (£139,000)
- the median defined contribution scheme pot for men (£23,000) is nearly three times the median for women (£8,100)
- half of women aged 55-64 have less than £22,000 in their private pension pot.
Tom Wright, chief executive of Age UK and co-chair of the FSC, said:
“With retirement now often lasting thirty or forty years – a third of your life – we’re in critical need of a radical new approach to making later life financially secure and comfortable.
“We believe a series of financial MOTs at significant points throughout retirement, together with a robust state and private pensions system, is the real way to help people make ends meet and live comfortably.”
Dr Alexander Scott, chief executive of the Chartered Insurance Institute and co-chair of the FSC, said:
“We support the findings of this Commission [the FSC] which are consistent with both our views and the long-term objective of raising public trust and confidence and building a long-term savings culture to address demographic changes the UK faces.”
